• June 13, 2018

Insurance limitations, lack of demand could factor in freestanding ER closures

Insurance limitations, lack of demand could factor in freestanding ER closures

150 150 Dr. Tom Oliverson

Community Impact
Lindsey Juarez

Since last year, at least three freestanding emergency rooms have closed in Frisco.

Richwood Park ER & Urgent Care and two Texas Health Emergency Room locations have closed since last June.

This is not only a trend seen locally but also elsewhere in the state, said Brad Shields, Texas Association of Freestanding Emergency Centers executive director.

Several factors could contribute to a freestanding ER closing, including insurance limitations and a lack of demand in a market, Shields said.

Freestanding ERs are separate from hospital ERs and provide emergency care services, according to the Texas Department of State Health Services.

The state’s freestanding ER industry experienced rapid growth following the passage of a 2009 state law that allowed the centers to be licensed.

Since then, the industry has faced some challenges with insurance companies, Shields said.

“Emergency care is an essential health benefit per the state and federal regulations, and unfortunately we’ve seen certain health carriers under-pay and [not]cover emergency room visits more and more,” he said. “Not only does it cause a problem for patients getting access to care, but it causes a problem for business owners who need to keep the lights on to provide that access to care.”

Uncertainty about whether insurance will cover a freestanding ER visit has scared some patients away from the centers, Shields said.

A new state law that went into effect last year requires freestanding ERs to list out which health insurance plans the facility is participating in. State Rep. Tom Oliverson, R-Cypress, who authored the legislation, told The Texas Tribune that the law helps clear confusion for freestanding ER patients.

Shields said demand for ERs will continue to grow with population increases. Still market forces can affect the industry.

“Just like any other business, there’s going to be some market forces in play,” Shields said. “Texas is a free market state, and the Legislature created this opportunity and saw the need for it 10 years ago. But those market forces will come into play, and they will result in some facilities needing to merge into something else or work with other health care providers for different models of care.”

For Texas Health Emergency Rooms, location was an issue for at least one of its freestanding ERs in Frisco, said Aaron Bujnowski, Texas Health Resources chief strategy officer.

“For example, one of the locations that closed was only one block from our future Texas Health Frisco Hospital, a location that did not exist when the emergency room was opened,” Bujnowski said in an email.

The Texas Health Resources Frisco Hospital is expected to open late next year, and it will include an ER.

Though freestanding ERs may not be growing as quickly as before in urban communities, Shields said he sees the industry expanding into rural communities. He also said there may be a rise of hybrid models—facilities that act as both an ER and urgent care center.

“If [patients]come in with the flu and they get a flu test, they’re going to get an urgent care bill,” he said. “If they come in with what they think to be a higher level of emergency, then they’re going to be treated like an emergency patient.”

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